USCG Documentation and Which State to use

[Jman]

Originally Posted by belizesailor

I can tell you that neither the State of Florida nor Texas share that point of view. In both cases, if the boat is physically in their State beyond a certain number of days (90 in the case of FL) then they will come after you for sales tax...even if the boat is registered in another State.

That may be true, but if you bought the boat more then six months ago, kept it in another state for at least the six months, and then moved to Florida, you are exempt from Florida use tax. Same rules apply to cars...


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[Maka]

What if you purchase the boat as a corporation / incorporated new owner ?
What ever taxes are levied would be tax deductible expenses wouldn't they?
Making them not free but at least discounted.

Then when you sell it you sell the corporation ( of which the boat is an asset) as opposed to selling the boat it self ,,,, the boat ownership does not change in that transaction. Neither does the boat registration.

Talk to an accountant, lots of ways to skin this cat. ( or monohull as the case may be)

[sailpower]

Originally Posted by Brown7477

Well I think I've decided to do a Delaware State registration
http://www.dnrec.delaware.gov/fw/Boa...PPLICATION.pdf
as well as the USCG Documentation.
USCG National Vessel Documentation Center, Forms Page
Can someone please tell me the correct procedure and forms for the documentation process?
The vessel was previously documented and the only paperwork I have is a signed and notarized CG-1340 Bill of Sale from the previous owner.
the reason for only having this is that he hadn't received the Original Certificate of Documentation as of the sale date.
I will probably call National Vessel Documentation Center tomorrow and see what they say I need to do to expedite this.

Registering it in DE will not help you with future sales/use tax liability. In some states the presence of DE on the transom will actually invite scrutiny!

These days states want their tax money and as you pass through them you will be subject to their terms.

Keep in mind that once sales/use tax is paid, the future states will almost always credit you with what you have already paid.

For example if you pay 5% sales tax where you are, the only time you would ever owe additional is if you trigger use tax in a state that has a higher rate. Then you would pay the difference.

Registering in DE will not help you at all. Those days are gone.

How much could the tax be on a 1981 35 footer? Seems like you are incurring unnecessary costs and hassle to save little.

[Group9]

Originally Posted by Dirk13

Another option would be to register your boat in Rhode Island.

There is no sales tax for boats in Rhode Island (unless you bought your boat prior to July 29, 1993)

Also you do not have to be a resident of Rhode Island in order to register your boat in RI.

Dirk

Mississippi only charges sales tax on sales of new or used boats from dealers. Sales of boats from individuals to individuals are not taxed.

[belizesailor]

Originally Posted by Maka

What if you purchase the boat as a corporation / incorporated new owner ?
What ever taxes are levied would be tax deductible expenses wouldn't they?
Making them not free but at least discounted.

Then when you sell it you sell the corporation ( of which the boat is an asset) as opposed to selling the boat it self ,,,, the boat ownership does not change in that transaction. Neither does the boat registration.

Talk to an accountant, lots of ways to skin this cat. ( or monohull as the case may be)

Deductable against what? If the entity does not produce taxable income then there is nothing to offset expenses against.

[Moontide]

In California one can escape sales tax if the vessel is bought "out of the state" and does not enter for 1 year or 6 months depending on your residency. CA residents 1 year, non-CA 6 months. Many buyers take an offshore delivery which means the sale did not occur in CA then remove the boat from the state for the time needed.

Property taxes here are based on where the boat is "habitually moored". Lots of fighting with assessors over this. Many counties in CA claim the boat is still taxable by CA even when on a circumnavigation with the intent of never returning.

[oldragbaggers]

Here's a thought.... Register the boat in the appropriate state according to where you reside and the boat is located, and pay the tax that is legally due.

[wcapital]

Yes, when we documented our vessel the USCG affirmed this - though they suggested that the home port at least have navigable water...so we made ours Lake Dillon, CO (near home) - though the boat never has even been to any of the 50 states, never mind Colorado!

The documentation process took awhile, doing it ourselves. Note they tend to be very anal about every detail - so get the full instructions and follow them completely and precisely. Ultimately they refused to put a launch date on ours, because the builder's certificate (from S. Africa) had a signature from the "owner" of the company (St. Francis Marine) - and the USCG said they needed one from an "officer" of the company!

Originally Posted by denverd0n

No. No offense, but this is not correct. The Coast Guard does not care what home port you choose when documenting your boat. The boat does not have to be there, nor ever have been there. You don't have to be there, nor ever have been there. Always liked that song about "Standin' on the corner..." but never even been to Arizona? The Coast Guard will be perfectly happy if you make Winslow, Arizona the home port for your documented vessel. You can pick any real place in the United States that you would like. (You cannot just make up an imaginary place.)

That said, as already mentioned, some states (California in particular) seem to scan the records and come after folks for taxes if your home port is in their state. They are not legally entitled to any taxes, just because you picked a home port in their state, but that won't stop them from trying to bully you into paying them.

The sales/use taxes, property taxes, or registration fees that you have to pay are mostly dependent on where you bought the boat and where you keep it. What home port you choose for your Coast Guard documentation has nothing to do with any of those things.

[wcapital]

Originally Posted by Maka

What if you purchase the boat as a corporation / incorporated new owner ?
What ever taxes are levied would be tax deductible expenses wouldn't they?
Making them not free but at least discounted.

Then when you sell it you sell the corporation ( of which the boat is an asset) as opposed to selling the boat it self ,,,, the boat ownership does not change in that transaction. Neither does the boat registration.

Talk to an accountant, lots of ways to skin this cat. ( or monohull as the case may be)

That only helps if the corporation has taxable income you can use the deduction against! Calling your boat a business to deduct losses, unless you really do generate income from it AND manage it yourself, is something the IRS isn't too friendly about allowing. But that's another long discussion, about which I'm sure there are numerous threads....

[sailpower]

Originally Posted by Group9

Mississippi only charges sales tax on sales of new or used boats from dealers. Sales of boats from individuals to individuals are not taxed.

So what happens after he registers in a state like RI or Mississippi but finds himself in, say MD for 60 days or what ever their trigger period is?

At that point MD wants their 6% use tax and will credit $0 that he didn't pay elsewhere. He thus owes MD 6% so he saved nothing and went to a lot of unnecessary trouble for no gain.

The State Use tax component is what makes these avoidance schemes ultimately useless.

[sailpower]

Originally Posted by Maka

What if you purchase the boat as a corporation / incorporated new owner ?
What ever taxes are levied would be tax deductible expenses wouldn't they?
Making them not free but at least discounted.

Then when you sell it you sell the corporation ( of which the boat is an asset) as opposed to selling the boat it self ,,,, the boat ownership does not change in that transaction. Neither does the boat registration.

Talk to an accountant, lots of ways to skin this cat. ( or monohull as the case may be)

Most people would be very leery of buying a private corporation of this type as you inherit any liabilities that may not be known at the time of purchase.

Again, sounds like he is talking about a $2,000 or so tax. How much do you spend or risk to try and save that?

[sanibel sailor]

documenting a boat is so easy that it makes little sense to hire somebody to do it for you.

[Nicholson58]

Originally Posted by 2Hulls

As for state taxes, Delaware is a good choice to register. But this is wholly separate from the home port. The home port basically has nothing to do with how you might be taxed. Think of home port as just an extension of the vessel's name. States taxes depend on where the vessel is physically located, when, and for how long.

Dave

This is absolutely true. The documentation name & port is like a person's first name - last name. You could pick Snow Bunny - Steamboat Co.

There is one exception - the pinheads in California run down the documentation list and send tax bills to anyone with a California port name.

Wilmington Del. loophole has been closed by most states. You must live there to claim tax exempt status. Tax & registration and water use fees are paid where you are a resident or where the boat is kept most of the time. Each state has quirks. Go to the state sites and figure out what they will try to get from you.

[belizesailor]

Originally Posted by sailpower

So what happens after he registers in a state like RI or Mississippi but finds himself in, say MD for 60 days or what ever their trigger period is?

At that point MD wants their 6% use tax and will credit $0 that he didn't pay elsewhere. He thus owes MD 6% so he saved nothing and went to a lot of unnecessary trouble for no gain.

The State Use tax component is what makes these avoidance schemes ultimately useless.

Not in MD, but similar scenario. Bought my boat in Florida sales tax exempt in 2001. Sailed it to Texas in 2003. Texas wanted to collect sales tax from me...on a boat I bought in another State 2 years before, but the FL Tax Exempt thing confused them and before they sorted it out, me & the boat were gone.

[PDA1]

Originally Posted by Brown7477

I have been searching for an answer to this question.
I am going to document a vessel but need to choose a home port to use.
I hate to admit this, but I really can not afford the taxes so I am looking for someplace that does not or will not charge taxes on the State Side registration. .

I can't help you but I'd like to speak a word of encouragement. How ever you can legitimately avoid paying any taxes is honorable and reasonable.